Automatic Weapons, Wine and Cannabis

In a recent post about how cannabis sales will hurt wine sales, one commenter noted that at least “there is no three-tier distribution system for weed.”

Well, there actually is a three-tier distribution system for cannabis in California, with some small exceptions for the smallest producers. Putting in place a three-tier distribution system (producer to distributor to dispensary) was the price to get law enforcement on board. This, of course, will eventually have to change otherwise the smallest cannabis farmers will be pushed out of business due to the requirements of selling at a lower price to distributors, along with having to expend significant resources on compliance.

There are other ways to see how the cannabis industry in California is very much like the wine industry beyond the three-tier system in place for cannabis cultivation and distribution. One indication is the very serious reporting that is happening by cannabis specific media.

One such source of industry information is Cannabis Business Times. CBT covers not only the developing California cannabis industry but the industry nationwide, and they are doing a very good job of leaning into the cannabis industry with important and well-researched articles. In its current issue, CBT has a very good and very detailed story on the state of the California recreational cannabis industry a few months in. “The Golden State Rules” describes a very similar divide in the CA cannabis industry based on the size of the growers. The well-heeled, corporate, venture capital-funded growers are winning in these early stages of legalization because they can afford to deal with the momentous regulations and compliance requirements, while the small growers are having such a hard time doing the same thing that many are simply not going legal yet.

It’s a familiar story to wine insofar as the divide is between large and small.

However, Cannabis Business Times does showcase one important difference between the wine industry and the cannabis industry. Look at this graphic over here on the right. That’s an ad for a security firm focused on providing all sorts of security services to the cannabis industry that is in the current issue of CBT. Look closely at its logo. I think I can safely say that at least the wine industry does not include service providers that feel a need to include pictures of automatic weapons in their advertising. 

I admit, it kinda cracks me up.

In any case, the similarities between cannabis and wine are many. They begin with each product being a path to intoxication, being a source of huge amounts of tax revenue, and being farm-based, and continues with the heavy regulatory and compliance requirements and the divide between large and small players.

For those of us who have been in the alcohol industry for some time and who have tried to follow the business from a regulatory and legal standpoint, it is fascinating to see the state attempt to grapple with a new edition of Repeal.

2 Responses

  1. Rebecca Stamey-White - April 16, 2018

    Just a quick note of clarification: there is a three-tier system in cannabis in California, but there are not tied-house laws that prevent licensees from having licenses in multiple tiers. The only restriction is against testing facilities having licenses in other tiers. Small producers can get a microbusiness license that allows them to have all three tiers with one license application, otherwise, a cultivator/manufacturer can be a distributor and a retailer if the zoning and local jurisdiction permits it, they pay for the licenses, and comply with all the conditions and requirements of licensure.

  2. JR - April 17, 2018

    What would make you believe that the picture you are referencing has an automatic weapon? This is an outline of a gun which is a tool I would hope a security company would be skilled in using.

    Until the price of marijuana comes down in states it is still criminalized there will be criminals trying to rob “legal” growers. There have been a couple well-publicized incidents of this happening in Sonoma County recently where criminals broke in and held civilians, hostage because out of area thugs thought a grow op was happening.

    I think you are missing the point worrying about California specific three tier laws and “automatic weapons” this whole industry is still the wild west and with the amount of money still available in the black market security is still a real concern.

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